1. Introduction
This Code of Conduct and Ethics is made pursuant to Clause 49 (Corporate Governance) of the Listing Agreement with Stock Exchanges and shall hereinafter be known as “the Code”. The Code will become effective from the date it is approved and adopted by the Board of Directors of the Company.
The objective of the Code is to promote and uphold the high standards of ethics observed by the Company in conducting its business. The Code lays down a broad policy for one’s conduct in dealing with the Company, fellow directors and employees and the external environment in which the Company operates.
The Company believes in conducting its business with responsibility, transparency, empowerment, honesty and environmental consciousness. The Company seeks to be a leader in its chosen area of operation and to operate and achieve excellence in everything it does.
All concerned are expected to read and understand the Code, uphold the standards prescribed therein in letter and spirit and to act within the bounds of the authority conferred upon them with duty to make and enact informed decisions and policies which result in enhancement of the value of the Company to its shareholders and simultaneously enable the Company to fulfill its obligations to other stake holders such as customers, employees and financiers and to the society in general.
2. Interpretation of Code
In this Code wherever the word “Director” appears, it will also include senior management personnel to the extent applicable. Any question or interpretation under this Code of Business Conduct and Ethics will be considered and dealt with by the Board or any committee or any person authorised by the Board in this behalf. The Board in justifiable case for reasons to be recorded in writing may waive any condition of the code for such compliance that is not prejudicial to the interest of the Company. The reasons for such waiver will be available at the Registered Office of the Company for information.
3. Applicability of the Code
The Code applies to all the members of Board of Directors and to Senior Management personnel of the Company. Senior management personnel shall mean all senior members of the management team, one level below the Executive Directors such as Sr. President/President/Vice-President, General Managers, other functional heads of each division or unit of the Company, Chief Financial Officer (CFO), Chief Executive Officer (CEO) and the Secretary of the Company.
4. Respect for individual
The Company’s vision is based on inspiring and unleashing creative potential in human assets of the Company. This is possible in an environment where we all respect the rights of those around us. In this direction, we endeavour:
- To treat individuals in all aspects of employment solely on the basis of ability irrespective of race, creed, religion, age, disability, gender, sexual orientation or marital status.
- Not to tolerate racial, sexual or any other kind of harassment
5. Honest and Ethical Conduct
The Directors and senior management personnel are expected to act in accordance with the highest standards of personal and professional integrity, honesty and ethical conduct while working for the Company.
We consider honest conduct to be conduct that is free from any fraud or deception. The ethical conduct is the conduct conforming to the accepted professional standards of conduct. Ethical conduct includes the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.
6. Conflicts of Interest
Each of us has a responsibility to the Company, its shareholders and towards each other. Although this duty does not prevent us from engaging in personal transactions and investments, it does demand that we avoid situations where conflict of interest might occur or appear to occur.
A “conflict of interest” occurs when an individual’s private interest interferes or appears to interfere with the interests of the Company. The Directors and senior management personnel must act at all times in the Company’s best interests conflict or appear to conflict with the interest of the Company. The personal interests will include those of their close relatives. Any Director or senior management personnel, who is aware of a conflict of interest or is concerned that a conflict might develop, is required to disclose the matter promptly to the Board of Directors in case of a Director and to the Chairperson or Managing Director in case of senior management personnel
Explanation: The expression relatives in this code mean, dependent parents, brothers, sisters, spouse, children, and to more or less, fall in line with the declamation of this term in Accounting Standard ‘18’ prescribed by the Institute of Chartered Accountants of India.
The Directors and senior management personnel shall not engage in any activity or enter into any relationship, which might result in conflict of interest, either directly or indirectly. An illustrations only and not being exhaustive, some of the common instances of conflict of interest which should be avoided are given below:
- None shall receive a personal benefit from a person or any entity which is seeking to do business or does business with the Company. They shall not participate in any decision making process of the Board involving another entity/person in which they have direct or indirect interest.
- Not to tolerate racial, sexual or any other kind of harassment
Relationship of Company with third parties:
Compensation from non-company Sources.
7. Corporate Opportunities
None shall exploit for their personal gain opportunity that is discovered through the use of corporate property, information or position unless the opportunity is disclosed fully in writing to the Company’s Board of Directors and the Board of Directors declines to pursue such opportunity. The Directors and senior management personnel are prohibited from using corporate property, information or position for personal gain and from competing with the Company. Wherever, it is difficult to differentiate between personal and Company benefits or there are both personal and Company benefits in certain activities, the only prudent course of conduct for the Directors and senior management personnel is to make sure that any use of corporate property or services of such transactions that is not solely for the benefit of the Company has prior approval of the Board of Directors.
8. Confidential Information
Confidentiality of information must be maintained by all concerned. Any information concerning the Company’s business, its customers, suppliers etc. which has been received or to which one has access during the course of employment or dealing with the Company shall be considered as confidential unless such information is publicly available. Such information must be held in confidence and used only for the purposes of the business of the Company and not disclosed otherwise unless authorised to do so or required to do so under law. This obligation continues for three years even after one leaves or disassociates himself from the Company. The senior management personnel shall not make announcements and/or disclose any news/information about the Company’s policies/business plans/any other sensitive issues directly to the public or through the media unless the same has been made public by informing the Stock Exchanges about the same by the Company through the office of the Company Secretary/Chief Financial Officer.
9. Prohibition of Insider Trading
The Company has formulated a Code of Internal Procedure and Conduct for Prevention of Insider Trading and all concerned are required to comply with the requirements of the said Code. The Directors and senior management personnel and their close relatives shall not directly or indirectly derive or attempt to derive any benefit or assist others to derive benefit when in possession of any price sensitive/unpublished information.
10. Price sensitive information means any information which relates directly or indirectly to the Company and which if published is likely to materially affect the price of securities of the Company. The following shall be deemed to be
- periodical financial results of the Company;
- intended declaration of dividends (both interim and final);
- issue of securities or buy-back of securities;
- any major expansion plans or execution of new projects;
- amalgamation, mergers or takeovers;
- disposal of the whole or substantial part of the undertaking; and
- significant changes in policies, plans or operations of the Company.
price sensitive information:-
“Unpublished” means information which is not published by the Company or its agents and is not specific in nature. Speculative reports in print or electronic media shall not be considered as published information.
11. Fair Dealing
The Company does not seek competitive advantages through illegal or unethical business practices. Each Director and senior management personnel should endeavour to deal fairly with the Company’s customers, service providers, suppliers, competitors and employees. None should take advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any unfair dealing practice. The Directors and senior management personnel shall immediately bring to the notice of the Board any unethical behavior and actual or suspected fraud.
12. Protection and proper use of Company Assets
Protecting the assets of the Company is a key responsibility of every employee. The Directors and senior management personnel must safeguard and protect the assets of the Company against misappropriation, loss, damage and ensure their efficient use. They must ensure that assets are not put into use, sold, loaned or dealt with in any other manner without appropriate authorisation. All Company assets should be accounted for and used only for legitimate business purposes of the Company.
13. Gifts and Donations
Though business gifts and donations are customary in many parts of the world they need to be viewed with caution. No Director or senior management personnel shall receive or offer, directly or indirectly, any gifts, donation or benefits which are intended or perceived to be intended to obtain unethical favour. Nominal gifts of commemorative nature for special events may be accepted.
14. Corporate Social Responsibility
The Company is committed to serve the community around its area of operations. The Company believes that no organisation can survive in isolation and it has a responsibility towards public at large. The Company aims to reach out to the neighbouring villages, conserve the environment and nurture young people. The Company shall take requisite community development initiatives around the areas of its operations.
15. Safety, Health and Environment
The Company’s vision envisages no compromise in its commitment to safety, health and responsible care for the environment. Health and safety of the people in and around its area of operations are of paramount importance to the Company.
The Company is committed to environment protection, pollution control and maintenance of ecological balance. The Company shall maintain high standards of pollution control, environment protection and safety.
16. Compliance with Laws, Rules and Regulations
The Company is committed to high standards of corporate governance and believes in compliance of all the laws, rules and regulations and other legal requirements directly or indirectly, effecting or concerning the Company and or required to be observed in connection with the business and affairs of the Company. The Company has endeavoured in setting standards for itself, which are ahead of time and higher than those stipulated by law. All concerned are required to comply with the applicable laws, rules and regulations both in letter and spirit.
The Code is in addition to and not in derogation with any Act, law, rules and regulations, and all other applicable policies and procedures adopted by the Company that governs the conduct of its Officers.
17. Financial and Operational Integrity
The Company is committed to disclose in its financial statements all the information required to be disclosed under the relevant accounting standards or under any law or regulation. It is essential to record all the transactions fully and properly in the financial statements. The Company shall prepare and maintain accounts of its business affairs truly and fairly in accordance with the accounting and financial reporting standards which represent the generally accepted guidelines, principles, standards, laws and regulations of the country. There shall be no willful omission of any transaction from the books and records of the Company.
No record, entry or document shall be false or misleading and no undisclosed or unrecorded account, fund or asset shall be established or maintained. The Auditors shall be provided full access to all information and records of the Company.
18. Disciplinary Actions
The matters covered in the Code are of utmost importance to the Company and are essential to the Company’s ability to conduct its business in accordance with the sated values. The Directors and senior management personnel are expected to adhere to the Code in carrying out their duties for the Company. Appropriate actions will be taken by the Board of Directors in case of Directors and by the Chairperson or Managing Director in case of senior management personnel for breach of the Code. Actions may include serious disciplinary action, removal from office as well as other remedies to the extent permitted by law and as considered appropriate in the circumstances.
19. Compliance Officer
The Company has appointed the Secretary as Compliance Officer for the purpose of the Code. The Compliance Officer will be available to the Directors and senior management personnel to resolve their queries and assist them in complying with the Code. Any question relating to how this Code should be interpreted or complied should be addressed to the Compliance Officer.
20. Implementation/Modification
The Board of Directors have, at its meeting held on 17th October 2005, approved and adopted this Code. The Board make the code effective from January 01, 2006
The Company is committed to continuously review and updating its policies and procedures and therefore this code is subject to the modifications . The Company will thus review and update this code from time to time to accommodate and incorporate the changes that takes place or may take place in the Company’s policy(ies) and procedures from time to time.
The Board of Directors of the Company shall have power to modify or replace the Code in part or in full, as they may deem fit from time to time in their absolute discretion.
Any change in policy and procedures will be circulated to all concerned for implementation.
The decision of the Board of Directors with regard to all matters relating to the Code will be final and binding on all concerned.
21. Annual Review/Affirmation
The Directors and senior management personnel shall affirm in writing compliance with the Code on an annual basis i.e., by 30th April each year in the format as per Annexure ‘A’.
The Annual Report of the Company shall contain a declaration to this effect signed by the Managing Director, as per format i.e., Annexure ‘B’.
ANNEXURE “B”
Format for affirming compliance with the Code of conduct on an annual basis
Date:________________
The Company Secretary
Soma Textiles & Industries Limited,
2, Red Cross Place,
Kolkata – 700 001
Dear Sir,
Sub: Code of Conduct for Board and Senior Management
It is hereby declared that all the members of the Board and the Senior Management personnel have affirmed compliance with the aforesaid Code of Conduct during the Financial Year …….
Signature:________________
Name—————————–
Desitnation:———————
ANNEXURE “A”
Format for affirming compliance with the Code of conduct on an annual basis
Date:________________
The Company Secretary
Soma Textiles & Industries Limited,
2, Red Cross Place,
Kolkata – 700 001
Dear Sir,
Sub: “Code of Conduct for members of the Board and Senior Management” approved and adopted at the Board Meeting held on 27th October, 2005 – .
I hereby affirm compliance with the Code of Conduct for members of the Board and Senior Management of the Company during the Financial year ………….
Signature:________________
Name—————————–
Desitnation:———————
